Portland city Commissioner Nick Fish, who oversees the Housing Bureau, pushed for loan modifications nearly a year and a half ago. Now the Housing Bureau has crafted a new plan.Beth Nakamura/The Oregonian

Nearly a year and a half ago, Commissioner Nick Fish ran into political opposition for a similar proposal. He wanted the city to take immediate action because a delay "would
interfere with the long term health and viability of affordable housing
projects."

Commissioner Randy Leonard raised questions in June 2011 about the proposal and wanted to know if housing officials adequately attempted to collect debts. Money collected from housing loans can be reinvested back into new projects.

The Housing Bureau has about 1,800 loans totaling $312 million, with more than half of the money coming from property taxes tied to urban renewal districts.

Although officials say that about 75 percent of that balance technically is collectable under loan terms, in reality the number is far lower. As a result, officials argue that approving the changes "could potentially reduce the amount of revenue coming into the city, but the impact would not be substantial" and instead would strengthen affordable housing providers.

Housing officials say that 45 loans exceed the proposed $2 million threshold for City Council approval. For anything below that amount, write downs could be approved by some combination of Housing Bureau Director Traci Manning, Chief Administrative Officer Jack Graham and Fish.

The Housing Bureau also has pledged to provide annual written reports to the City Council, and officials said they raised the threshold from last year's proposal to "strike a balance between an appropriate level of transparency and efficiency."

Since July 2010, the city has written down seven housing loans for $1.8 million through a different approval process under Portland's Office of Management and Finance.

Manning, who formerly worked as the chief operating officer for Central City Concern, said borrowers will apply for loan write downs and applications will be reviewed by an investment committee of city staff. She said loans won't be written off entirely, ensuring the city maintains liens on projects to protect affordability requirements to serve low-income tenants. The city says its loans have helped pay for more than 8,000 units of affordable housing.

Officials said Housing Bureau write downs will be made on a case by case basis after a review of financial projections. But officials acknowledged that decisions will be subjective and they have no written criteria for approving or denying applications.

The proposal heads to the City Council at 2 p.m. today. A vote is expected next week.